Q. "Can we reduce or eliminate benefits when an employee's hours drop below 40 a week?"
Answer:
The short answer is: it's complicated. This touches on both legal compliance and strategic benefits management, especially in organizations with 50 or more full-time equivalent (FTE) employees. Here's what you need to know:
ACA Mandate: If your ministry has 50 or more FTEs, the Affordable Care Act (ACA) generally requires you to offer affordable, minimum essential health coverage to all employees who work an average of 30+ hours per week.
Fluctuating Hours: If an employee's hours regularly fall below that 30-hour threshold, it might trigger different rules, such as eligibility for COBRA if you are a larger employer or your state's laws require it.
Benefit Tiers: Separate from the ACA mandate, organizations can adjust benefits, especially due to rising costs. It's common to see ministries create different "tiers." For example, some might offer 100% of a "bronze level" health plan, but give employees the option to pay the difference for a "gold level" plan. Or, they might offer more comprehensive benefits (i.e.,100% coverage for employee + family) only to executive-level staff, with varying tiers for other positions, but strategic decisions like these must be driven by sustainable financial stewardship.
The key is to understand the legal obligations based on your ministry's size and state laws, and then make intentional, transparent decisions about your overall benefits strategy to ensure fairness and sustainability.